KUALA LUMPUR: Malaysian palm oil futures ended higher on Thursday, driven by bargain buying after falling for two days, while traders assessed simmering Russia-Ukraine tensions.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange ended up 74 ringgit, or 1.36%, at 5,507 ringgit ($1,315.89) a tonne.
Uncertainties over the Russia-Ukraine standoff should keep the market cautious and may limit a sharp bounce in palm oil, a Kuala Lumpur-based trader said.
Oil prices dropped as talks to resurrect a nuclear deal with Iran entered their final stages, but losses were limited by heightened tensions between top energy exporter Russia and the West over Ukraine.
Palm closes at record high as India import tax cut fuels demand hopes
Weaker crude prices make palm a less attractive option for biodiesel feedstock.
Palm oil fundamentals have been positive so far this month and cargo surveyors said Feb. 1-15 exports surged between 11% and 24% month-on-month, while a millers' association pegged a 0.46% uptick in production.
Malaysia has maintained its March export tax for crude palm oil at 8% and raised its reference price.
In related oils, Chicago soyoil prices fell 0.3%, after rallying 2% overnight on concerns that the forecast rain may be insufficient to avert further drought damage to crops in Argentina and southern Brazil.
Dalian's most-active soyoil contract rose 1.4%, while its palm oil contract gained 1%.
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